Executive Summary

EMCOR delivered record Q3 revenue of $4.30B (+16.4% YoY) and diluted EPS of $6.57 (+13.3% YoY), with a 9.4% operating margin; RPOs hit an all‑time high $12.61B (+29% YoY) and book‑to‑bill was 1.16 .
Guidance was tightened: FY25 revenue to $16.7–$16.8B (from $16.4–$16.9B) and non‑GAAP diluted EPS to $25.00–$25.75 (raised low end by $0.50) .
Segments broadly grew; Electrical revenue +52% YoY (Miller Electric + organic), Mechanical +7% YoY; building services up 2% YoY; UK up 28% YoY; Industrial flat YoY, but mix improved profitability .
Management flagged margin headwinds from intangible amortization (~~90bps in Electrical) and start‑up inefficiencies in new geographies (~~$13M impact), yet reiterated multi‑quarter margin bands and confidence in data centers, healthcare, water/wastewater, and manufacturing .

What Went Well and What Went Wrong

What Went Well

Record revenue, EPS, and RPO; CEO: “We had an outstanding third quarter… revenue growth of 16.4% and an exceptional 9.4% operating margin… RPOs are again at an all‑time high” .
Data center momentum: Network & Communications RPOs a record $4.3B, almost double YoY; over 80% of 2025 growth organic in this space .
Operating performance across segments: Mechanical construction margin 12.9% (flat YoY), Building Services margin expansion to 7.3%, UK margin 5.6% on overhead leverage; CFO emphasized disciplined execution and SG&A control .

What Went Wrong

Electrical margin fell to 11.3% from an unprecedented 14.1% last year due to incremental intangible amortization (~90bps) and lower productivity as the company scaled into new geographies .
High‑Tech Manufacturing RPOs declined YoY as certain semiconductor projects completed; management highlighted episodic awards and resource allocation choices toward data centers .
Industrial Services demand headwinds (turnarounds shifted into Q4/2026); segment still improved mix (higher‑margin shop work), but broader timing hurt year‑to‑date utilization .

Financial Results

Consolidated performance vs prior periods and estimates

Metric	Q3 2024	Q2 2025	Q3 2025	Q3 2025 Consensus
Revenue ($USD Billions)	$3.70	$4.30	$4.30	$4.280*
Diluted EPS ($)	$5.80	$6.72	$6.57	$6.528*
Operating Margin (%)	9.8%	9.6%	9.4%	—
Gross Profit ($USD Millions)	$734.7	$833.8	$835.3	—
Gross Margin (%)	19.9%	19.4%	19.4%	—

Values with * retrieved from S&P Global.

Q3 2025 modestly beat Street on both revenue ($4.3015B vs $4.280B*) and EPS ($6.57 vs $6.53*), reflecting broad demand and disciplined execution despite amortization and scaling headwinds .

Segment revenues (Q3 2025 vs Q3 2024)

Segment	Q3 2024 ($MM)	Q3 2025 ($MM)
U.S. Electrical Construction & Facilities Services	$845.0	$1,285.3
U.S. Mechanical Construction & Facilities Services	$1,662.2	$1,779.3
U.S. Building Services	$796.9	$813.9
U.S. Industrial Services	$286.4	$286.9
U.K. Building Services	$106.4	$136.2
Total	$3,696.9	$4,301.5

Segment operating income and margins (Q3 2025 vs Q3 2024)

Segment	Q3 2024 OI ($MM)	Q3 2024 OI Margin (%)	Q3 2025 OI ($MM)	Q3 2025 OI Margin (%)
U.S. Electrical Construction & Facilities Services	$119.1	14.1%	$145.2	11.3%
U.S. Mechanical Construction & Facilities Services	$214.8	12.9%	$229.3	12.9%
U.S. Building Services	$55.6	7.0%	$59.4	7.3%
U.S. Industrial Services	$3.3	1.1%	$6.3	2.2%
U.K. Building Services	$5.5	5.2%	$7.6	5.6%
Corporate	($34.8)	—	($42.0)	—
Consolidated OI	$363.5	9.8%	$405.7	9.4%

KPIs and operating metrics

KPI	Q3 2024	Q2 2025	Q3 2025
RPOs ($B)	$9.79	$11.91	$12.61
Book-to-Bill	—	—	1.16
Operating Cash Flow ($MM)	—	$193.7	$475.5
Network & Communications RPO ($B)	~2.15 [inferred prior year]	$3.8	$4.3
Healthcare RPO ($B)	—	$1.4	$1.3
Manufacturing & Industrial RPO ($B)	—	$1.0	$1.1
Water & Wastewater RPO ($B)	—	$0.725	$1.0

Note: Sector RPOs reflect point‑in‑time values disclosed on calls; sequential RPO growth was +6% from June to September .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	$16.4–$16.9B	$16.7–$16.8B	Narrowed upward at low end
Non‑GAAP Operating Margin	FY 2025	9.0%–9.4%	9.2%–9.4%	Raised low end
Non‑GAAP Diluted EPS	FY 2025	$24.50–$25.75	$25.00–$25.75	Raised low end
Dividend per Share	Q3 2025	—	$0.25 declared	Maintained quarterly dividend
EMCOR UK Sale (proceeds)	4Q 2025 expected close	—	~$255M; not discontinued ops, EPS impact limited to period post‑close	Deal proceeds to fund M&A/returns

Non‑GAAP guidance excludes transaction costs (Miller Electric, EMCOR UK) and anticipated gain on UK sale .

Earnings Call Themes & Trends

Topic	Q1 2025 (prior)	Q2 2025 (prior)	Q3 2025 (current)	Trend
Data centers (AI/cloud)	RPO increases led by Network & Communications; integration of Miller Electric; strong execution	Network & Communications RPO $3.8B; Mechanical margins record; multi‑market expansion	N&C RPO $4.3B; multi‑trade presence; expansion into new geographies and markets; hyperscalers engaging directly	Accelerating scale and customer intimacy
Margins & amortization	8.2% operating margin; non‑GAAP 8.5% (transaction costs)	9.6% consolidated; Mechanical record margin; Electrical margin expansion YoY	9.4% consolidated; Electrical margin headwinds from amortization and start‑up inefficiency; reaffirms 12–24m bands	Within band; temporary headwinds acknowledged
Sector breadth beyond DC	Healthcare, institutional, manufacturing, hospitality growth	Manufacturing/industrial (food processing), hospitality; site‑based restructuring	Water/wastewater +$300M QoQ; healthcare steady; retrofit/commercial demand	Broad‑based growth sustained
Capital allocation	Share repurchases; M&A (Miller)	$432M YTD buybacks; $887M M&A; disciplined pipeline	UK sale ~$255M proceeds; signed Danforth acquisition ($350–$400M revenue)	Balanced organic + M&A; portfolio sharpening
Macro/tariffs	Guidance includes potential tariff/ macro impacts	Notes tariff/trade uncertainty; margin assumptions consistent	Mentions tariffs/trade, possible government shutdown; guidance reflects risks	Cautious but undeterred

Management Commentary

CEO: “We had an outstanding third quarter… strong execution within the diverse sectors we serve… RPOs are again at an all‑time high… pipeline remains strong” .
CFO: “We generated a record third quarter operating income of $405.7 million and an impressive 9.4% operating margin… diluted EPS was $6.57 vs $5.80, +13.3%” .
CEO on Electrical margins: “Without the amortization headwind or investment in new markets, reality is we’re 14%+ in Electrical” .
CEO on data centers: hyperscalers directly engaged EMCOR’s leaders to share proprietary plans, reinforcing multi‑year demand visibility .
CFO on UK sale: ~$255M proceeds, not treated as discontinued ops; minimal EPS impact in 2025 due to timing; adjust for transaction expenses and gain at Q4 .

Q&A Highlights

Margin debate: Investors questioned Electrical margin step‑down; CFO quantified ~90bps amortization impact and ~$13M start‑up inefficiency, with margins expected within 12–24 month bands .
Sector breadth: Strong growth across water/wastewater, healthcare, manufacturing (food processing), retrofit commercial; high‑tech manufacturing awards remain episodic .
Capacity & prefabrication: Prefab/VDC investments enable revenue to outpace manhours; management targets 3–5% productivity gains and continues expanding shops across trades .
Capital returns vs M&A: Buybacks moderated amid robust M&A and prefab investments (~400k sq ft added in 2025); announced Danforth acquisition with near‑term backlog amortization headwind .
RPO booking cadence: RPOs include only contracted work (GMP phases booked as released); data center contract sizes trending larger; non‑data center work drives >1yr RPO burn .

Estimates Context

EME beat consensus on Q3 revenue and EPS:

Revenue: Actual $4.3015B vs consensus $4.280B* .
EPS: Actual $6.57 vs consensus $6.53* .

Where to adjust: Modest estimate raises likely for FY revenue/ EPS given tightened guidance and stronger data center pipeline; however, amortization and new-market start-up costs temper near-term margin upside .

Values retrieved from S&P Global.

Key Takeaways for Investors

Quality beat with record revenue/EPS and strong RPOs; slight beat vs Street should support near‑term stock strength, especially given pipeline breadth and book‑to‑bill >1 .
Margin narrative: Transient amortization and new‑geography start‑up costs masked underlying Electrical strength (>14% ex‑headwinds), reinforcing multi‑quarter margin bands .
Data center tailwinds remain robust (cloud + AI); hyperscalers’ direct engagement underscores multi‑year demand; EMCOR’s multi‑trade footprint is a differentiator .
UK exit and Danforth acquisition sharpen focus on core U.S. markets; proceeds and cash generation support balanced capital allocation (organic, M&A, buybacks/dividends) .
Sector diversification (healthcare, water/wastewater, manufacturing) mitigates cyclicality; episodic high‑tech manufacturing and timing of industrial turnarounds remain watch items .
Guidance tightened upward at low end for revenue and EPS; Q4 margin mix (backlog amortization) and project timing are the key variables into year‑end .
Actionable: Favor dips tied to quarterly margin noise; monitor RPO conversion, UK sale timing, Danforth close, and continued prefab/VDC productivity gains .

Notes:
- Non‑GAAP guidance excludes transaction costs and anticipated gain on UK sale **[105634_0000105634-25-000082_eme-ex991_2025930xq3.htm:1]** **[105634_0000105634-25-000082_eme-ex991_2025930xq3.htm:3]**.
- Consensus estimates marked with * are values retrieved from S&P Global.

Citations: Press release and 8‑K:
Q2 press release:
Q3 earnings call transcripts:
Q2 earnings call:
Q1 press release:
Historical gross margin reference:

EMCOR Group, Inc. (EME)·Q3 2025 Earnings Summary